JEDDAH – Rapid growth and regional expansion as well as globalization of some industries are dramatically increasing business complexity in the region. Amid these intricacies, the success of running a business certainly necessitates acumen. James Allen, a senior partner in Bain & Company's London office and co-author of the new book “Repeatability: Build Enduring Businesses for a World of Constant Change”, said CEOs nowadays face a paradox of profitable growth, defined by two opposing facts. First, in an increasingly turbulent and fast-moving world, fewer and fewer companies — only 9 percent over the past decade — manage to sustain more than a modest level of profitable growth for more than a few years. And yet, nine out of 10 executives feel they have ample opportunities for growth. What stands in their way, they say, is not the market but internal complexity that slows their reaction time, clouds their focus and strangles their company's ability to adapt. Out of 377 global executives surveyed, Allen noted that 85 percent said their biggest barriers to achieving their objectives were linked to internal complexity. The issues they identified were familiar: an inability of their organization to really focus resources, slow and cumbersome decision processes, challenges of mobilizing organizations that are not aligned, resources spread too uniformly, inability to invest for the long term. In short, complexity is the silent killer of profitable growth, Allen, together with Chris Zook, said in the book. Allen said in their research, they found out that some companies share a common simplicity in the concept and execution of their strategy. They call these companies Great Repeatable Models (GRM) as they focus on the few things that they do uniquely well, and replicate them again and again. “We wanted to know what truly differentiates these GRM companies from the rest, and how other businesses can learn from their success stories. Writing the book itself was an enriching and inspiring experience as we gained invaluable insights about key concepts and business principles that drive success,” Allen said. Allen said the book revealed that in any industry, nearly half of what differentiates the best performers from the worst lies in how these successful companies exemplify three simple yet powerful business principles, which are: well-differentiated core; clear “non-negotiables”; and closed-loop learning. Regarding the first principle, Allen said their study has shown that 93 percent of the top 20 percent of performers had some strong form of differentiation in their core. They classified 15 types of differentiation, ranging from low cost to differentiated product or service, that have helped top performers stand out three times better than the bottom 30 percent of performers. The second principle (clear non-negotiables) essentially refers to well-defined core principles that are widely and easily shared within the entire organization, from top executives down to the rank and file. As the book explains, “non-negotiables” act to reduce the distance between the CEO and the front-line employees, improving communication. The third principle (closed-loop learning) is about learning processes that enable GRM companies to adapt faster than their competitors. The ability of some businesses to gather instant, actionable feedback from customers is an excellent example of this principle. These principles, Allen said, are further articulated in the book, which presents many more concepts and examples of GRM companies. Moreover, the book is relevant to business organizations that are keen to always eager to learn more about the most successful growth strategies adopted by the most successful companies. The book provides a rare glimpse into how GRM companies gradually developed over the years. Did they achieve their success by chance, through trial and error, or simply because of the dynamism and personality of the company's founder, he asked. The book provides great insights about these salient points that many companies will certainly find greatly interesting and helpful. It also provides in-depth case studies that can directly connect with the real-world experiences of many business organizations. About the book's relevance to the Middle East, Allen emphatically said “absolutely” relevant. For example, many family businesses in the region were founded by visionaries who honed a repeatable model for introducing new products in the market. Spot a gap, find the best product, build a deep relationship with the relevant partner and leverage deep local knowledge to execute on the ground. New opportunities – and competition – in those markets are becoming regional or global; and business portfolios have expanded to include local manufacturing, real estate and other investments. A new repeatable model (for international growth, or for adding value to diverse business activities) becomes essential to cut through the complexity, he stressed. – SG/QJM
